Court of Appeal for Ontario

Date: 2022-06-08 Docket: M53405 (C70182)

Between: The Corporation of the Town of Caledon, Plaintiff (Respondent) (Responding Party)

And: Darzi Holdings Ltd., Rafat General Contractors Inc. and Layth Rafat Salim, a.k.a. Carlos Salim, Defendants (Appellants) (Moving Parties)

Before: Brown J.A. (Motion Judge)

Counsel: Kaleigh Sonshine, for the moving parties Raivo Uukkivi and Melissa Winch, for the responding party

Heard: May 31, 2022 by video conference

Endorsement

Overview

[1] This is a motion by the appellants, Darzi Holdings Ltd., Rafat General Contractors Inc., and Layth Rafat Salim a.k.a. Carlos Salim, to set aside the Registrar’s order dismissing their appeal and for an extension of time to perfect the appeal. It is brought in the context of a civil proceeding that found them in contempt of an injunction order and sentenced them to a fine of $1 million jointly and severally.

[2] The unusual feature of this motion is that after entering into an agreement with the respondent, The Corporation of the Town of Caledon (the “Town”), to perfect their appeal by March 31, 2022, the appellants then amended their notice of appeal to assert ineffective assistance of counsel as a new ground of appeal and took the position that they did not need to perfect their appeal until the materials for their new ground of appeal were completed.

[3] For the reasons I will set out below, I set aside the dismissal order and grant an extension of time to perfect but impose strict terms on the pre-hearing conduct of this appeal, the compliance with which I shall supervise as the appeal management judge.

Background

The 2019 Injunction

[4] The appellants operate construction businesses. They stored a large amount of equipment and materials on several pieces of land in the Town. The Town took the position that the appellants’ use of the lands contravened local zoning by-laws.

[5] In 2019, the Town sought an injunction to restrain the appellants’ use of the lands and the removal of a fence. Schabas J. granted the injunction sought by order dated September 12, 2019 (the “Injunction Order”).

The contempt motion: liability phase

[6] The appellants’ use of the lands continued. In July 2020, the Town moved to find the appellants in contempt of the Injunction Order and to impose a fine payable to the Town. The appellants were represented by Mr. Bernie Romano. The appellants brought a cross-motion to stay the enforcement of the Injunction Order but did not proceed with it.

[7] Myers J. heard the contempt motion. The appellants did not deny that the Town had proven, in respect of most of the properties, the three elements of contempt identified in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79. However, the appellants asked the court to exercise its discretion not to grant a contempt order, largely because of economic challenges the appellants contended the pandemic posed to their businesses.

[8] By reasons dated February 8, 2021, Myers J. declined to exercise his discretion to withhold a contempt remedy. Instead, he found the appellants guilty of contempt of court for breaching the Injunction Order: Town of Caledon v. Darzi Holdings Ltd., 2021 ONSC 985, 14 M.P.L.R. (6th) 147, at para. 29.

[9] On March 4, 2021, the appellants filed a notice of appeal from the contempt finding (the “Contempt Appeal”). Mr. Romano was still acting as their counsel at the time.

[10] However, a few days later, on March 9, 2021, the appellants filed a notice appointing new counsel.

[11] On June 1, 2021, the Registrar of this court dismissed the appellants’ Contempt Appeal for delay. No steps were taken to set aside that dismissal. The Contempt Appeal is at an end.

The contempt motion: scheduling phase

[12] Steps to schedule the sentencing hearing started in April 2021. Ultimately, Myers J. presided over a two-day sentencing hearing on November 26 and December 2, 2021. By reasons dated December 9, 2021, Myers J. imposed a fine of $1 million on the appellants, jointly and severally.

The sentence appeal

[13] On January 7, 2022, the appellants changed counsel yet again to their current counsel who, on the same day, delivered a notice of appeal from the sentence (the “Sentence Appeal”). The notice of appeal set out a single ground of appeal:

The Court misapplied the sentencing principles under the case law under all of the circumstances and failed to take into account the mitigating factors and the attempts by the Appellants to purge any contempt.

[14] The record discloses that appellants’ counsel took a number of steps to prepare the requisite appeal materials. However, as the March 8 perfection date prescribed by the rules approached, no order had been taken out for either the disposition of the liability or sentencing phases of the contempt motion. I will defer further discussion of this point until later in these reasons. Suffice it to say that on March 8, 2022, counsel for the parties entered into a consent agreement under which the appellants would deliver, on March 8, all materials required to perfect the appeal, less the issued and entered order, and would perfect their appeal by March 31, 2022.

[15] My reading of the record is that after March 8, appellants’ counsel took appropriate steps to take out the required order, but drafts submitted to the court were rejected for various reasons. The court finally issued the order on April 14, 2022 (the “Myers Order”), after the agreed upon date for perfection of the appeal.

[16] By that time, the Registrar of this court had issued an order, dated March 31, 2022, dismissing the Sentence Appeal for delay, which the appellants received on April 12, 2022 (the “Dismissal Order”).

[17] I strongly suspect that had the court’s delay in issuing and entering the Myers Order been the only reason for the appellants’ failure to perfect the Sentence Appeal by the agreed upon date of March 31, the Town likely would have acceded to a request to set aside the Registrar’s Dismissal Order.

[18] However, another event had happened after counsel reached their March 8 perfection agreement, but before the agreed upon perfection date of March 31, 2022. That event was the filing of an amended notice of appeal by the appellants on March 18, 2022.

The March 18, 2022 amended notice of appeal: ineffective assistance of counsel ground of appeal

[19] Pursuant to the consent agreement, on March 8 the appellants sent to the Town’s counsel their appeal materials, which included the January notice of appeal but not the issued and entered order. To that point in time, no suggestion had been made by the appellants that they intended to amend their notice of appeal.

[20] On March 18, 2022, the appellants served and filed an amended notice of appeal that contained four new grounds of appeal. Two of the grounds (Nos. 5 and 6) simply stated arguments the appellants had made in their March 8 draft factum regarding the errors Myers J. allegedly had made in applying sentencing principles. There was nothing substantively new in those two grounds of appeal.

[21] The same cannot be said for the other two new grounds of appeal, Nos. 7 and 8, which alleged ineffective assistance of counsel by the appellants’ former counsel, Mr. Romano:

7. The Appellants claim that former counsel, Romano Law Office, was incompetent due to their (i) failure to advise the Appellants to bring a motion at the earliest opportunity to vary the order of Justice Schabas dated September 12th 2019 (the “Injunction”) on the basis of extenuating circumstances caused by the COVID-19 pandemic and other factors, and (ii) failure to file the necessary evidence available from the Appellants establishing that significant efforts were made to comply with the Injunction;

8. The Appellants claim that the incompetence of counsel resulted in a miscarriage of justice and prejudice.

[22] In support of these new grounds of appeal, the appellants also amended their notice of appeal to include a request to file fresh evidence.

[23] The March 8 draft factum made no mention of the professional conduct of their former counsel, Mr. Romano, let alone any suggestion of ineffective assistance of counsel as alleged in the new grounds of appeal Nos. 7 and 8.

The motion to set aside and extend

[24] The appellants did not perfect their appeal by March 31, 2022. As mentioned, they only received the issued and entered Myers Order around April 14, 2022.

[25] On May 1, 2022, the appellants served on the Town their record for this motion. Their initial notice of motion only asked to set aside the Dismissal Order. In an amended May 20, 2022 notice of motion, the appellants also seek directions regarding their ineffective assistance of counsel ground of appeal, as well as an extension of time to perfect “in accordance with directions to be supplied by the Court.”

[26] The amended notice of appeal, and supporting affidavits from appellants’ counsel, disclose that the appellants were proceeding with their appeal on the basis of certain assumptions:

• They assumed the protocol for dealing with allegations of ineffective assistance of counsel as a ground of appeal found in s. 17 of this court’s “Practice Direction Concerning Criminal Appeals at the Court of Appeal for Ontario”, (March 1, 2017) (the “Criminal Appeal Practice Direction”), applied to the appellants’ civil contempt Sentence Appeal;

• As a result, the appellants expected the court to approach them about appointing a case management judge for their appeal and such an appointment “would delay any dismissal until instructions could be obtained from such judge as to how to proceed”;

• They also assumed that by asserting ineffective assistance of counsel as a new ground of appeal, they could void their agreed-upon obligation to perfect by March 31; and

• They further assumed that asserting ineffective assistance of counsel as a ground of appeal would delay the requirement to perfect the appeal – a kind of “tolling” ground of appeal, so to speak. As their counsel, Mr. Sherkin, deposed:

  We have bona fide pursed this appeal and are prepared to perfect once we have direction from the case management judge to be assigned on the ground of appeal asserting “ineffective assistance of counsel”.

[27] The Town opposes granting the appellants any relief. One basis of their opposition is the evidence they have filed about the appellants’ continuing conduct. Michael Maltby, one of the Town’s municipal by-law enforcement officers, deposed in his responding affidavit that on April 19, 2022 he visited one the properties subject to the Injunction Order. He observed that the property was still being used for open storage and as a contractor’s facility with trucks bearing the name “Rafat”, contrary to the Town’s by-laws.

Analysis

The governing test

[28] The principles governing a request to set aside a Registrar’s dismissal order and for an extension of the time to perfect an appeal are well-known. The overarching principle is whether the justice of the case requires granting or refusing the relief sought. As part of the analysis, the court typically considers several factors: (i) whether the appellant formed an intention to perfect the appeal within the time prescribed by the Rules of Civil Procedure, R.R.O. 1990, Reg. 194; (ii) whether the appellant moved with due dispatch to set aside the dismissal order (a matter not in dispute on this motion); (iii) the length of the delay; (iv) the explanation for the delay; (v) the merits of the proposed appeal; and (vi) any prejudice to the respondent.

[29] I propose to consider each of the factors in dispute and then conclude with a consideration of the overall justice of the case.

Intention to perfect

[30] The appellants obviously intended to appeal their sentence within the time prescribed by the Rules, as their notice of appeal was filed within the stipulated time.

[31] I am less certain that the appellants intended to perfect their Sentence Appeal within the time prescribed by the Rules. I say this for several reasons.

[32] First, no affidavit from the personal appellant or a representative of the corporate appellants was filed on this motion. In a very real sense, the record is silent on the appellants’ intention. While they filed three affidavits from their counsel, that hardly constitutes direct evidence of the appellants’ intention.

[33] The lack of such an affidavit is not without significance given certain comments made by the judge who presided over the contempt proceeding. In his costs endorsement dated January 21, 2022, Myers J. made two observations about the appellants’ litigation conduct. The first concerned how the appellants had treated a consent agreement in the proceedings below:

In my view, the contemnors conducted these proceedings in a reprehensible manner that is deserving of an award of full or substantial indemnity costs in any event. The reasoning is straightforward. The contemnors entered into a consent order. They took no steps to obey it on a timely basis despite the timelines to which they had agreed. Then when contempt was alleged, they bought time by throwing the kitchen sink at the motion. Their defences were, in the main, frivolous. [Emphasis added]

[34] Later in his endorsement, Myers J. made a general comment about the appellants’ litigation conduct:

Everything about the way in which the proceeding was handled was a disingenuous stalling tactic to delay complying with the court’s order.

[35] Second, although the appellants are represented on this appeal by a major law firm with extensive appellate experience, to date they have taken several positions on this appeal that raise questions about whether they intended to perfect their appeal within the prescribed time period.

[36] Their first questionable position was to contend it was the Town’s responsibility to take out the Myers Order. The appellants initially sat back to wait until the Town did so, notwithstanding January 24 and February 1, 2022 correspondence from the Town to their lawyers that it expected the appellants to prepare a draft order. The Town’s expectation was a reasonable one – it is the responsibility of an appellant to take out the order below in a timely fashion. This is because an appellant must include in its appeal book and compendium – a document necessary to perfect an appeal – “a copy of the order or decision appealed from as signed and entered”: Rules of Civil Procedure, r. 61.10(1)(c). Instead, it was only on March 8, 2022, literally on the eve of the expiration of the perfection period, that the appellants agreed to do that which they were obligated to do – namely, take out the order.

[37] Their second questionable position was that notwithstanding the clear terms of the March 8 consent agreement, and notwithstanding that by that time the appellants’ current law firm had been on the record for over two months, the appellants considered that they were entitled, without prior notice to the Town, to deliver an amended notice of appeal that raised a new ground of appeal – ineffective assistance of counsel.

[38] Their third questionable position was asserting that the Criminal Appeal Practice Direction applied to their appeal from the Myers Order. They proceeded on the assumption that they did not have to move their appeal forward pending a call from the court notifying them of the appointment of a case management judge. They also took the position that they were not required to perfect their appeal until a case management judge gave directions for them to do so.

[39] With respect, there was absolutely no basis for the appellants to take those positions. By its terms the Criminal Appeal Practice Direction applies only to criminal proceedings:

This Practice Direction applies to solicitor appeals, motions and applications, including limited retainers, s. 684 appointments, and Crown appeals. It was made pursuant to the court’s rule-making powers in sections 482 and 482.1 of the Criminal Code. [Emphasis added.]

[40] The proceeding in which the appellants were found guilty of contempt of the Injunction Order and sentenced for that breach was a civil proceeding, initiated under r. 60.11 of the Rules of Civil Procedure. The Criminal Appeal Practice Direction patently has no application to the appellants’ Sentence Appeal. Consequently, there was no reasonable basis for appellants’ assumption that by filing an amended notice of appeal alleging ineffective assistance of counsel they could sit back and await a call from this court advising of the appointment of a case management judge: Criminal Appeal Practice Direction, s. 5.

[41] In any event, by their terms the provisions of the Criminal Appeal Practice Direction regarding allegations of ineffective assistance of counsel do not stop the perfection clock from running. Section 17 specifically states:

The procedure described in this section of the Practice Direction does not relieve appeal counsel of the obligation to perfect the appeal in accordance with the Criminal Appeal Rules. The appeal management judge may give directions or make orders relieving appeal counsel or the respondent of strict compliance with this Practice Direction or the Criminal Appeal Rules. [Emphasis added]

[42] Combined, these factors lead me to doubt that the appellants intended to perfect their appeal within the time prescribed by the Rules or perfect their appeal within a reasonable time after receiving the issued and entered Myers Order.

Length of the delay and explanation for the delay

[43] By virtue of the consent agreement, the appellants were required to perfect their appeal by March 31, 2022. They did take steps to take out the Myers Order but ended up facing institutional delay on the part of the court. They received the Dismissal Order on April 12, 2022 and then filed this motion to set aside on a reasonably prompt basis – May 3, 2022.

[44] However, the appellants have not provided any reasonable explanation about why they delayed just over two months – until after they had agreed to perfect by March 31 – before they contacted former counsel, Mr. Romano, about their intention to allege ineffective assistance of counsel. Since it is that ground of appeal on which the appellants rely to justify their failure to perform the March 8 perfection agreement, their failure to provide a reasonable explanation for that delay weighs against them.

The merits of the proposed appeal

[45] The appellants advance two grounds of appeal against the sentence imposed of a fine of $1 million on a joint and several basis.

[46] First, they contend that sentence was unfit and disproportionate. I accept that this ground of appeal is not frivolous, in the sense that it is arguable. Given the size of the fine, whether it is too high or on the light side is an arguable matter for the consideration of a panel.

[47] Second, they contend that former counsel, Mr. Romano, provided ineffective assistance that resulted in a miscarriage of justice and prejudice. I have two concerns about the merits of this ground of appeal:

• An allegation of ineffective assistance of counsel in a criminal proceeding, if established, can result in an appellate court setting aside a verdict on the ground that there was a “miscarriage of justice”: Criminal Code, s. 686(1)(a)(iii). However, the right to effective assistance of counsel in a criminal trial flows from the broader right of an accused to be represented by counsel at trial, a right derived from the common law regarding the criminal trial, the Criminal Code, and ss. 7 and 11(d) of the Canadian Charter of Rights and Freedoms: R. v. Joanisse, 102 C.C.C. (3d) 35, at p. 57 (Ont. C.A.); R. v. G.D.B., 2000 SCC 22, [2000] 1 S.C.R. 520, at para. 24; Hamish Stewart, Fundamental Justice: Section 7 of the Canadian Charter of Rights and Freedoms, 2nd ed. (Toronto: Irwin Law, 2019), at pp. 288-290). The appellants have not placed before me any authority that the law governing civil proceedings, such as the proceeding at issue in the Sentence Appeal, recognizes a right to effective assistance of counsel which, if breached, could occasion a miscarriage of justice that could result in setting aside an order in a civil contempt proceeding; [^1]

• In terms of the specific allegations made against former counsel, I confess that I struggle to understand how conduct by counsel who acted for the appellants only during the liability phase of the contempt proceeding has any nexus with the deficiencies in the sentencing phase alleged by the appellants. The appellant was represented by two other counsel on the sentencing phase, who were retained months before the sentencing hearing. Presumably it was those new counsel who, under the instructions of the appellants, crafted the record placed before the sentencing judge.

[48] For purposes of the determining this motion to set aside and extend, and based on the limited record before me, I regard the merits of the appellants’ ineffective assistance of counsel ground of appeal as very weak.

Prejudice to the Town

[49] The Town filed two affidavits in response to the appellants’ motion to set aside the Dismissal Order. Neither affidavit expressly dealt with the issue of prejudice. The by-law enforcement officer’s affidavit deposed to a continuing breach of the Injunction Order.

[50] In oral argument, the Town submitted that I should exercise my discretion and dismiss the motion on the basis that the appellants’ alleged continuing breach of the Injunction Order disentitled them to a hearing of their Sentence Appeal: Dickie v. Dickie, 2007 SCC 8, [2007] 1 S.C.R. 346, at para. 6. While there is no doubt that a panel of this court has the authority to refuse to entertain an appeal on the basis of an appellant’s continuing disobedience of court orders, I have strong reservations about my authority to do so as a single judge sitting in motions.

Overall consideration of the justice of the case

[51] One is left, then, with several factors to weigh and balance as part of determining the overall justice of the case.

[52] On the one hand, a number of factors weigh against granting the appellants’ motion: I have concluded that the appellants did not intend to perfect their appeal within the time prescribed by the Rules nor did they intend to perfect their appeal within a reasonable time after receiving the issued and entered Myers Order; the appellants did not perform their obligations under the March 8 agreement to perfect; the delay of the appellants in initiating steps to take out the Myers Order was not reasonable; they appellants have not provided a reasonable explanation about their delay in asserting ineffective assistance of counsel as a ground of appeal; and, finally, that ground of appeal is very weak, if it is even available to the appellants.

[53] On the other hand: the delay in perfecting the appeal was not lengthy; the appellants have an arguable ground of appeal regarding the fitness of the sentence, in terms of the quantum of the fine; and the Town did not adduce direct evidence of prejudice, although certainly the appellants’ delay in and of itself gives rise to prejudice.

[54] This is a close case. However, given the existence of an arguable ground of appeal based on the size of the fine, together with the ability of this court to manage the balance of the appeal’s pre-hearing steps in a way to minimize the prejudice of delay to the Town, I have decided to exercise my discretion and set aside the Dismissal Order, but on strict terms, which also constitute the directions sought by the appellants on this motion.

Disposition and Conditions

[55] Accordingly, I make the following order and directions:

(i) The Dismissal Order is set aside;

(ii) The appellants shall perfect their appeal no later than Monday, June 13, 2022 at 12 noon. If they do not, their appeal is dismissed. According to the record before me, all that remains to complete the appeal materials is the insertion of the Myers Order. Any materials relating to the allegation of ineffective assistance of counsel shall be dealt with as part of the appellants’ motion for leave to file fresh evidence;

(iii) The appellants’ appeal shall be heard on Friday, October 14, 2022. The appeal is allocated two hours – one hour for each party. That date is peremptory to the appellants, whether or not they are represented by counsel at that point of time and regardless of the timing of any change in counsel they might make between now and October 14;

(iv) As to the appellants’ motion for leave to file fresh evidence concerning their allegation of ineffective assistance of counsel against Mr. Romano:

a. I will act as appeal management judge to deal with the management of that motion and any other pre-hearing matters;

b. The motion for fresh evidence shall proceed on the basis that the particulars of ineffective assistance of counsel are those set out in Ground of Appeal No. 7 of the Amended Notice of Appeal and para. 5 of the Appellants’ Reply Factum dated May 27, 2022, which are summarized at Appendix A;

c. Appellants’ counsel confirmed that they have received Mr. Romano’s entire file. Consequently, commencing Monday, June 20, 2022 appellants’ counsel shall permit counsel for the Town to have access to the file, except for any materials over which the appellants claim solicitor-client privilege;

d. If the appellants assert a claim of solicitor-client privilege over any part of Mr. Romano’s file, on or before Wednesday, June 15, 2020 they shall provide the Town’s counsel with (i) an inventory identifying the materials alleged to be privileged, to the extent it is possible to do so without compromising the privilege; and (ii) a brief written statement of appellants’ counsel’s position on the basis of the claim of the solicitor-client privilege and the extent or scope of any waiver of the privilege arising from the allegation of ineffective assistance at the contempt hearing;

e. If any such claim of solicitor-client privilege is asserted, the parties shall arrange a case conference to be held before me during the week of June 27, 2022 to obtain directions on the issue;

f. The appellants shall serve any materials upon which they intend to rely on the motion for fresh evidence no later than Friday, July 8, 2022;

g. The Town shall serve any materials upon which they intend to rely in response to the motion for fresh evidence no later than Friday, July 22, 2022;

h. Any examinations on the materials served by the appellants or the Town must be completed no later than Wednesday, August 31, 2022;

i. The appellants shall serve and file their formal fresh evidence motion record, together with a supplementary factum, no later than Friday, September 16, 2022; and

j. The Town shall serve and file their formal fresh evidence respondent’s record, together with a supplementary factum, no later than Friday, September 30, 2022.

[56] If the parties are unable to settle the costs of this motion, they may file brief (up to 5 pages) written cost submissions and file them with the court no later than Friday, June 24, 2022.

“David Brown J.A.”

Appendix "A"

Particulars of the Appellants’ Allegations of Ineffective Assistance of Counsel

Amended Notice of Appeal, Ground of Appeal No. 7:

7. The Appellants claim that former counsel, Romano Law Office, was incompetent due to their (i) failure to advise the Appellants to bring a motion at the earliest opportunity to vary the order of Justice Schabas dated September 12th 2019 (the “Injunction”) on the basis of extenuating circumstances caused by the COVID-19 pandemic and other factors, and (ii) failure to file the necessary evidence available from the Appellants establishing that significant efforts were made to comply with the Injunction.

Summary of Appellants’ Reply Factum, para. 5:

The Appellants will argue that the following evidence was available to their prior counsel, Mr. Romano, but never placed into the record or used to obtain a variance to the Injunction Order so as to delay its implementation:

(a) The names and contact information of the real estate agents engaged by the Appellants to search for new properties to store their equipment;

(b) The offers tendered by the Appellants to purchase and rent various local properties for the purpose of storing their equipment;

(c) The telephone calls made by the Appellants to the Town of Caledon to discuss the list of properties the Town had provided to the Appellants which allegedly fit their storage requirements;

(d) The telephone calls with Mayor Allan Thomson during which the Appellants were advised they could apply for a zoning application for Coleraine East and West;

(e) The telephone calls with Councillor Annette Groves (Region of Peel) about where to store the equipment;

(f) The various discussions with, and the involvement of, the Minister of Municipal Affairs and Housing regarding the Appellants’ attempt to obtain a zoning variance;

(g) The contracts lost by the Appellants due to the COVID-19 pandemic;

(h) The temporary zoning application made to the Town; and

(i) Details of the Ministry of Labour’s requirement for a fence to protect workers on the properties.

Footnotes

[^1]: In OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2021 ONCA 520, this court stated, at para. 44:

Allegations of ineffective legal assistance at trial in civil matters are properly raised by way of a negligence action brought by the client against the lawyer. There may be some civil cases in which the nature of the claim gives rise to a public interest that transcends the private interests of the litigants and requires that an appellant be permitted to raise the competence of its trial counsel as a ground for setting aside the trial judgment. The claim advanced by the appellant against the respondents is a straightforward negligence claim seeking damages for pure economic loss. Nothing in the nature of this case justifies permitting the appellant to rely on the incompetence of counsel as a basis for denying the respondents the judgment obtained at trial: see [D.W. v. White](https://www.canlii.org/en/on/onca/doc/2004/2004canlii22543/2004canlii22543.html), at paras. 42-51, 55.